There hasn’t been any official word on how Microsoft will be handling trade-ins with the Xbox One, except for their assurances that the console will be designed to allow for used game sales. Given what we already know about how it actually uses the discs and accounts, though, the question has continually been asked.

According to retail sources, speaking to MCV, Microsoft has a specific set of terms and conditions that retailers must agree to if they wish to be able to purchase and sell used Xbox One titles. This process will require the retailer to support Azure, a cloud-based system that allows Microsoft to register any given copy of a game as already owned or “traded-in,” at which point it is removed from the account of the gamer who traded the title. This would certainly go a long way toward explaining the Xbox One’s periodic online check-ins.

More to the point, the terms and conditions entitle Microsoft and its publishing partners to a cut of the revenue on traded games. This is, reportedly, so much as to leave retailers with as little as a ten percent share of the revenue. In the case of a used game retailing for $55, that would provide the retailer with only $5.50. Unless Microsoft and its publishing partners are willing to subsidize the cost of purchasing a game from a consumer for trade, that means that trade-in values above $5 would be pointless, utterly destroying the incentive for trade and the used game market as a whole.

Again, Microsoft hasn’t confirmed any of this. It seems too stilted and one-sided to be true, but that will only make it all the more appalling if it is.